Fast-growing solution provider and Dell EMC Titanium partner Sanity Solutions is saving customers millions by transitioning them from a public cloud-first approach to a hybrid strategy.

“As you look at some of the larger customers, they don’t even know what they’re spending on the cloud,” said Chris Gross, vice president of Sanity Solutions, named one of CRN’s 2018 Tech Elite 250 [3].

“They have so many different organizations that are using their own budgets to buy those resources that they may, at an initial glance, think it’s cheaper for them to continue to do business in one of these large public clouds. But if you help them to really understand the overall cost that they are actually spending from a total company standpoint on those predictable workloads that are just churning and burning at the same rate every month – a lot of them are shocked at how much they’re spending,” said Gross. “Then all of a sudden they say, ‘Yeah, with that kind of a budget, I can build the same thing.'”

Denver, Colo.-based Sanity recently did a five-year total cost of ownership analysis with a customer that was spending around $2.5 million per year with Amazon Web Services. Sanity was able to show them that if they implemented a hybrid approach, over the next five years – after buying the infrastructure – the customer would save $4.5 million.

“So [they’ll be] almost cutting their cost in half by doing a hybrid approach rather than 100 percent in the public cloud,” said Gross.

Solution providers powered by hybrid solutions from the likes of Dell and HPE are seeing opportunities to provide solutions that offer massive cost-savings through the rapid rise of software-defined data center technology. Through automation and orchestration innovation, businesses are starting to realize the cost benefits of leveraging on-premises software-defined solutions compared to public clouds like AWS.

Raymond Tuchman, CEO of Experis Technology Group, a fast-growing Potomac, Md.-based HPE private cloud powerhouse with its own 80,000-square-foot cloud services data center, said he is providing HPE solutions that are coming in consistently at 40 percent cost savings over AWS for his customers with “higher uptime, better security and better redundancy.”

Tuchman said customers are becoming increasingly aware of the cost, security and business continuity advantages of hybrid computing w versus public cloud.

“Customers are finally realizing that AWS and Azure are much more expensive than private cloud models,” he said. “We are winning more and more accounts today that three years ago would have just gone to public cloud. Our leasing business – which provides a monthly consumption based model for our customers – is up 400 percent this year.”

AWS did not respond for comment by press time.

“AWS isn’t the cheapest solution,” said Peter McKay, Co-CEO and President of Veeam, a storage cloud services company that supports public and private cloud solutions, during a roundtable discussion of software-defined data center thought leaders earlier this month. “Everybody thinks going to the public cloud, going to AWS – it’s cheap. And it’s not.”

Earlier this month in an interview with CRN [4], Dell CEO and founder Michael Dell said an on-premises solution is more “cost effective” for 85 percent to 90 percent of predictable workloads.

“What we have seen when you automate and modernize the infrastructure, software-define everything, and move up to the platform level, is that for the predictable workloads – which are for most companies 85 percent to 90 percent of their workloads – an on-premises solution is much more cost effective,” said Dell in an interview with CRN

Hewlett Packard Enterprise, which staked out the hybrid computing model years ago, is driving dramatic cost savings by analyzing customer workloads and coming up with hybrid solutions.

For example, cloud storage provider Dropbox has seen what amounts to a savings of $74.6 million in operating costs over the last two years by moving from AWS to a hybrid cloud model with an “open architecture approach and a custom server solution” built on HPE ProLiant and Cloudline service provider systems — all financed by HPE Financial Services.

Drew Houston, founder and CEO Of Dropbox, told HPE Discover attendees two years ago when the deal was announced that the move to a hybrid cloud was driven by the “performance flexibility and, most importantly, the security” Dropbox could get from an HPE cloud solution — all at a lower cost.

“We started in the public cloud, but we realized moving to the hybrid infrastructure brought a lot of the [Dropbox] accounts — all that performance at a lower cost and a lot more flexibility,” he said.

HPE CEO Antonio Neri has positioned HPE at the nexus of the hybrid computing boom. He told CRN that the company’s OneSphere multi-cloud management product will result in cost savings of 20 percent to 40 percent for customers grappling with where to get the biggest bang for their buck from both private and public cloud.

HPE’s OneSphere Software as a Service (SaaS) platform for the first time brings “financial transparency” to the perennial problem of determining where customers should move workloads to – either on-premise private, or off-premise public cloud – to get the best performance at the lowest cost, said Neri.

“We know when we go to an on-prem infrastructure you can save 30 [percent] to 40 percent,” said Neri. “We believe with the full automation of this platform we actually can save customers between 20 [percent] to 40 percent depending on what the infrastructure is and what the workload is.”